Knowledge Hub

Why Professional Advice Is Important When Approaching Retirement

Good financial advice is essential when approaching retirement. Setting up income streams and understanding how much you will need to live out your retirement plans, are just some of the key issues that need to be considered.

Wade fowl is professor of retirement income at the American College of  Financial Services.

Retirement income planning is much more difficult than traditional wealth management.

There’s a lot more risk in retirement, there’s a lot more potential to make irreversible decisions that could be very costly in the long term, and so working with a well-qualified financial adviser who understands the retirement income problem can do much to really improve a financial plan.

To allow for much more spending throughout retirement it can be just very helpful.

It’s a very complex task. Some people might want to do it on their own but they also have to think about surviving spouses. They also have to worry about cognitive decline. Having a good financial planner in place can really help in a great number of ways in retirement

So how do you and your advisor go about devising a retirement income strategy? First you need to ask yourself a very important question: how much money do you actually need to retire?

That is a difficult question to answer. If they have a good understanding about their budget and how much they want to spend that makes a question a lot easier.

How much do I have from pensions or other income sources from outside my investment portfolio and then what kind of spending rate do I think will be sustainable from my investment portfolio? And then you can calculate how much you need to save for example if you think you can spend at a 5% rate.

You need 20 times what you want to be able to spend and that would become your target to try to achieve to allow for a transition to retirement.

If you want to find out more about this subject visit professor fouls blog.

There’s a wealth of information on there including the latest research on retirement planning, You’ll find it at retirement

Watch Video